Foreclosures Up 19% from February to March 2010!
Just when you thought housing was turning the corner, foreclosure data has been released and sits at a new high, 367,056 for the month of March, 8% higher than March 2009 (Source: Realtytrac).
This comes as a surprise as the Home Buyer Tax Credit is set to expire at the end of this month, and the government ready to see if housing and the economy can stand on it's own feet without stimulus money.
Take a look at the chart to the left. It is clear that the foreclosure problem is not going away, and the unsettling data for March leads me to wonder when all of this craziness will end. Some markets are starting to show strong demand and increased activity, but how can this level of foreclosures continue without further damaging the economy and hurting housing?
I think a big part of the problem is that unemployment continues to flirt with the 10% mark, and in reality, close to 20% of all workers are out of work or working part time when they would prefer to work full time. The bottom line is that without income, people can't pay their mortgage! Until the employment picture improves, the foreclosure problem is not going away. This is not to mention the fact that many people's credit will continue to get worse so that they are essentially out of the housing market for several years while they rebuild their lives after financial disaster.
The chart on the right also details foreclosure data by state, showing some of the hardest-hit areas. It looks like there is some sign of improvement, but ouch- if you are in one of these states, especially Nevada or California, it's still looking ugly.
Given the foreclosure statistics that are coming in, it would not surprise me to see the Fed jump back into the stimulus game later this year. With summer approaching, traditionally a strong time of year for housing, it will be interesting to see how this situation plays out.
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RJ Baxter First Mortgage Corp
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303-670-0137 (direct)
27902 Meadow Drive, Suite 120
Evergreen, Colorado 80439
